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TMI Blog2024 (10) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... osecute the application which was filed by L T Finance Ltd. . Present is a case where Assignment Agreement is a registered document. In the facts of the present case where Assignment Agreement is registered and has been filed in the proceedings under Section 7, by virtue of Section 5(2) of the SARFAESI Act, Phoenix Arc Pvt. Ltd. is entitled to prosecute and deeming clause as contained in Section 5(2) fully protects and entitled the Phoenix Arc Pvt. Ltd. to prosecute Section 7 application. There are no error in the order of the Adjudicating Authority allowing application. The Adjudicating Authority did not commit any error in rejecting the application of the Corporate Debtor praying for impounding of the document - there are no error in the order passed by the Adjudicating Authority deciding both the applications - appeal dismissed. - [Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical), [Arun Baroka] Member (Technical) For Appellant: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Rishab Banerji, Mr. Animesh Kumar, Mr. Kunal Godhwani, Mr. Zeeshan Haque and Mr. Tanay Agarwal, Advocates For Respondents: Mr. Vishesh Kalra, Mr. Sourabh Tandon, Ms. Alka Chaturvedi, Advocates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying on the Assignment Agreement. It is submitted that the provision of Section 5(1A) of the SARFAESI Act, 2002 which grant exemption of payment of stamp duty is not applicable in the State of Maharashtra. It is submitted that the relief which was granted in payment of stamp duty in the State of Maharashtra with regard to Assignment Agreement by Government Order dated 06.05.2002 was subsequently withdrawn by order dated 26.08.2005. Hence, for Assignment Agreement, stamp duty as is required to be paid under the Maharashtra Stamp Act, 1958 is required to be paid. 4 .Shri Krishnendu Datta, Learned Senior Counsel for the Respondent refuting the submissions of the Counsel for the Appellant submits that the Assignment Agreement being registered document has rightly been relied by the Adjudicating Authority. With regard to document which is registered there is presumption that document is also adequately stamped. It is submitted that the Adjudicating Authority has rightly allowed the substitution application filed by Phoenix Arc Pvt. Ltd. . It is submitted that Section 7 application filed by L T Finance Ltd. has been permitted to be prosecuted by Phoenix Arc Pvt. Ltd. as per the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction company], such [asset reconstruction company] shall, on such acquisition, be deemed to be the lender and all the rights of such bank or financial institution shall vest in such company in relation to such financial assets. [(2A) If the bank or financial institution is holding any right, title or interest upon any tangible asset or intangible asset to secure payment of any unpaid portion of the purchase price of such asset or an obligation incurred or credit otherwise provided to enable the borrower to acquire the tangible asset or assignment or licence of intangible asset, such right, title or interest shall vest in the asset reconstruction company on acquisition of such assets under sub- section (1).] (3) Unless otherwise expressly provided by this Act, all contracts, deeds, bonds, agreements, powers of- attorney, grants of legal representation, permissions, approvals, consents or no-objections under any law or otherwise and other instruments of whatever nature which relate to the said financial asset and which are subsisting or having effect immediately before the acquisition of financial asset under sub- section (1) and to which the concerned bank or financial institutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamp Act, 1958, the exemption of stamp duty is not available with regard to acquisition of rights and interest by Asset Reconstruction Company. Learned counsel for the Appellant has referred to Schedule-II r/w Section 76 of Maharashtra Stamp Act by virtue of which Indian Stamp Act, 1899 has been repealed in the State of Maharashtra. 25.Section 5 of the SARFAESI Act, 2002 begin with expression Notwithstanding anything contained in any agreement or any other law for the time being in force . Thus, overriding effect has been given to the provision of Section 5(1) by virtue of which an Asset Reconstruction Company may acquire financial assets of any bank or financial institution. Sub-section (1A) granting exemption from stamp duty was inserted w.e.f. 01.09.2016. We may also look into Sub-section (2) of Section 5 which contains a deeming clause by which on acquisition by an Asset Reconstruction Company, the Asset Reconstruction Company shall be deemed to be a lender. 26.Section 5(2) came for consideration before this Tribunal in Naresh Kumar Aggarwal vs. CFM Asset Reconstruction Pvt. Ltd. Ors., Company Appeal (AT) (Ins.) No.470 of 2023 where this Tribunal considered Sub-section (2) of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in state of affairs. It does not say that, having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. These observations have been followed time out of number by the decisions of this Court. (See, for example, M. Venugopal v. Divisional Manager, LIC: MANU/SC/0310/1994: (1994) 2 SCC 323 at page 329). *** *** *** 94. Although a deeming provision is to deem what is not there in reality, thereby requiring the subject matter to be treated as if it were real, yet several authorities and judgments show that a deeming fiction can also be used to put beyond doubt a particular construction that might otherwise be uncertain. Thus, Stroud's Judicial Dictionary of Words and Phrases (7th Edition, 2008), defines deemed as follows: Deemed as used in statutory definitions to extend the denotation of the defined term to things it would not in ordinary parlance denote , is often a convenient device for reducing the verbiage or an enactment, but that does not mean that wherever it is used it has that effect; to deem means simply to judge or reach a conclusion about something, and the words deem and deemed when used in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition would have covered them or not.' (Per Lord President Cooper in Ferguson v. McMillan 1954 SLT 109 (Scot)) 16.Whether the word deemed when used in a statute established a conclusive or a rebuttable presumption depended upon the context (see St. Leon Village Consolidated School District v. Ronceray: (1960) 23 DLR (2d) 32 (Can)). '.... I regard its primary function as to bring in something which would otherwise be excluded.' (Per Viscount Simonds in Barclays Bank Ltd. MANU/WB/0296/1959: 1961 AC 509 at AC p. 523.) V. IRC: Deems means is of opinion or considers or decides and there is no implication of steps to be taken before the opinion is formed or the decision is taken. [See R. v. Brixton Prison (Governor), ex p Soblen: (1963) 2 QB 243 at QB p. 315.] 22.3. On a conspectus of the principles so enunciated, it is clear that although the word 'deemed' is employed for different purposes in different contexts but one of its principal purpose, in essence, is to deem what may or may not be in reality, thereby requiring the subject-matter to be treated as if real. Applying the principles to the provision at hand i.e., Section 43 of the Code, it could reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that when a document is presented before the Registering Authority, Registering Authority is to satisfy itself with regard to stamp duty paid on the document and in event Registering Authority finds that document is inadequately stamped, it may send the document to the Collector for determining the deficiency. In the present case, document was registered without raising any objection regarding inadequacy of the stamp. 11 .In the facts of the present case where Assignment Agreement is registered and has been filed in the proceedings under Section 7, we are of the view that by virtue of Section 5(2) of the SARFAESI Act, Phoenix Arc Pvt. Ltd. is entitled to prosecute and deeming clause as contained in Section 5(2) fully protects and entitled the Phoenix Arc Pvt. Ltd. to prosecute Section 7 application. We, thus, do not find any error in the order of the Adjudicating Authority allowing IA (IBC) 504/KB/2022 filed by Phoenix Arc Pvt. Ltd. . 12. In the present case, the Adjudicating Authority itself has noticed the larger Bench Judgment of the Hon ble Supreme Court in M/s. Bhaskar Raju and Brothers and Anr. vs. M/s. Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram Other C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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